Mediation is very effective in resolving disputes. Franchisors are enthusiastic about mediation, especially pre-suit, because it can eliminate the need to disclose settlements to prospective franchisees otherwise required under the FTC Rule. Regardless of whether the mediation involves a franchise dispute, or another negotiated dispute resolution, the focus is now on implementing settlement agreements which
FPRs in the Time of COVID-19
As if the global pandemic was not enough to cause franchisors and their attorneys heartburn, the North American Securities Administrators Association released a commentary titled “Disclosing Financial Performance Representations in the Time of COVID-19” to add another spice to the stomach turning situation. While it provides franchisors with recommendations on evaluating existing FPRs,
Are COVID Immunity Laws Good for Franchising?
(This post solely reflects the views of the author, and not that of Fox Rothschild or any of its other attorneys.)
While I am not opposed to immunity laws generally, I am not fan of immunity that is too broad. Given that stance, I have grave concerns about the liability protections and COVID immunities being
Washington v. Washington: State of No-Poach
The Department of Justice backed off no-poach challenges in franchise agreements in 2019, but the state doubled down. The result? Washington state challenged a raft of no-poach/no-hire provisions in 225 franchise systems, resulting in agreements requiring franchisors to agree not to enforce the offending provisions not just in Washington but nationwide. On April 28, 2020
FDD Item 19 Financial Performance Representations in the Age of COVID-19
With most non-essential businesses closed across the country, it is easy to forget we are two weeks away from the April 30th Franchise Disclosure Document (FDD) update deadline for franchisors with a calendar fiscal year end. Some franchise systems are delaying the preparation and issuance of an updated 2020 FDD and corresponding state renewal registrations.
NJFPA Refresher – Community of Interest
As many readers may know, the FTC Rule on Franchising’s definition of franchise contains three basic definitional elements: (1) license of a trademark, (2) payment of a fee, and (3) provision of assistance or exertion of control. Additionally, twenty-six states regulate the offer and sale of franchises. Of those twenty-six states, eight define a franchise
How Do You Determine Your Franchise System’s Technology Fee?
In my recent experience, most franchise start-ups and emerging systems typically charge a technology fee or, at a minimum, reserve the right to charge a technology fee in the future. These fees are easily justifiable. Franchisors are routinely creating, developing, managing, and upgrading software programs, websites, phone systems, online platforms and similar technology solutions used
No-Poach and Antitrust, Part Deux (Or, is the risk worth it?)
In a recent post, I expressed the view that no-poach clauses in franchise agreements are unlikely to violate the antitrust laws. Recent activity, however, has given me a “maybe yes, maybe no” on my prediction.
First, two recent rulings offer differing views on the issue of the appropriate standard to apply to the antitrust
Online Reviews – Best Practices for Dealing with Yelp from Yelp!
The Pennsylvania Restaurant and Lodging Association provides many benefits to its hospitality industry members. One of those benefits is access to its interesting and useful webinar series. This month’s webinar “Five Star State of Mind: Handling Online Reviews” was presented by Ali Schwartz of Yelp. Unlike Yelp’s sales team, Ali is a
No-Poach Provision: The Latest Cause of Worry to Franchise Systems
The recent antitrust attacks on no-poach clauses encourage insomnia among franchise lawyers. But is the attack serious or just a flash in the pan, soon to be extinguished?
The insomnia began in the tech industry, where front-line players with huge market shares agreed not to poach each other’s employees. No-poach agreements among dominant market players,